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Lump Sum From Pension Without Income

Lump Sum From Pension Without Income

We require a lump Sum from our pension plan, to purchase an apartment in Portugal, but do not require any further income at this time.

Client Circumstances

  • Mr and Mrs Goodchild are aged 60
  • They are both in good health
  • Mr Goodchild has a pension pot valued at £400,000, he is a higher rate tax payer
  • They require a lump sum of approx £100,000, to purchase an apartment in Portugal
  • Mr and Mrs Goodchild are still working
  • They do not require any further income at this time, but will require income at a later date, when they stop working

Recommended Solutions

  • Take 25% Pension Commencement Lump Sum, (PCLS)
  • Convert pension to Drawdown
  • Do not take any income at this time
  • Review situation on an annual basis
  • Continue to save in a new pension plan to obtain tax relief at higher rate

Benefits from advice given

  • Release capital from pension to buy apartment
  • Do not have to take income from Drawdown
  • Avoids additional Income Tax
  • Income can be flexible to meet their needs
  • Drawdown can be passed to spouse in the event of death
  • Can continue to save in a new pension plan to obtain tax relief, while still working

NOTE: Death benefits reduction in Drawdown

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Future Servicing

We will look to carry out a regular review of your circumstances, objectives, needs and portfolio performance to ensure all arrangements continue to be suitable and advise of any changes that may be appropriate.

This example is for illustrative purposes only, based on current legislation and tax allowances. Tax rules and regulations are subject to change.

Budget Planner State Pension Forecast

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